Blog series – Andrew Hall

In advance of our event at the Bank of England on 21 March 2017, we asked interested parties to write on the theme: Worthy of trust? Law, ethics and culture in banking…

Note: The views expressed in this blog are the personal views of the author and not necessarily those of the CISI.

Why should we trust our banks? Do we actually trust even our own bank, or banks generally? How deep is that trust; has it been earned or is it rather grudgingly given, accompanied by the feeling that it has not actually been earned? I rather suspect the latter, which is quite dispiriting. So how serious are our banks in seeking to remedy this and are they likely to be successful anytime soon?

That question of how long it will take to restore trust in banks is one which the CISI has asked audiences at our events regularly since the global financial crisis and the answer has always been ‘at least ten years’. From that, one might deduce that this is a long-term project and it is unrealistic to expect overnight success. But it is now some time since the worst years of the financial crisis. which leads to the question ‘what will success look like?’.

One answer might be when respected surveys of Trust such as the annual Edelman Trust Barometer or ‘Which?’ surveys show a sustained improvement in levels of trust markedly beyond their current level of approximately 50% of respondents trusting banks. Or more prosaically, when we are prepared to recommend our banks to one another as trustworthy or ‘good’ organisations. What, beyond our day to interactions with our own bank, might influence our response if asked whether we trust banks(ers)?

Since most of us do not have any direct business interaction with actual or apparent interest rate fixers, we are dependent upon being told by the media how wicked they are, or how egregious their offences, without really having any idea or necessarily caring what they have actually done, or what impact it has, if any, on our lives. My point is not to downplay what they have done or its impact, but rather to suggest that our views are possibly being formed by someone else. In most instances, the court cases that are now happening cover events that took place several years ago and banks can argue that they do not represent today’s culture in these organisations. But then how do we know? Why should we take their word for it? Why should we trust them?

And then there is PPI, a subject that must have knocked on every door in the land and where bankers may argue that with the value and number of claims of mis-selling having been paid out, a degree of scepticism on the part of banks over the ongoing level of claims is not surprising. On the other hand claimants and potential claimants have no sympathy for them and such is the absence of trust, consider banks to be ‘fair game’. Billions of pounds of repayments and reparations have not served to restore trust. We use banks because we have to, not necessarily because we want to, or because we trust them again.

As I said earlier, this is a long-term project and banks and the banking industry must accept it, even to the extent that they may feel that ‘ethics fatigue’ has set in. Bob Diamond’s ‘time for remorse and apology is over’ has not yet been accepted by the public.